Selling a Massachusetts home in a buyer’s market
The title of the article really should read buying and selling a home simultaneously in a buyer’s market.
In my daily life as a Massachusetts Realtor I come across lots of folks who do not sell their home even though they want to. The thought process is that they have bought sometime over the last five years or so and know if they put their home on the market they will be taking a loss.
In the Metrowest Massachusetts area the peak of the Real Estate market was in the Spring of 2005 so if you purchased a home after that there is no question you will be taking a loss on that home if you sell today (September of 2010). In this area of Massachusetts depending on the town and the type of home, the peak in values could be down anywhere from 20%-30%.
When people think about the concept of selling their home many can not get past the fact that they will take a loss on their current home. They fail to see the bigger Real Estate picture. If you are going to stay local, selling your home in a buyer’s market is not an issue because you are going to be purchasing a home under the same market conditions!
Here is a simple Real Estate concept that many consumers do not grasp. You bought your home for $500,000 and using a figure of 20% it has dropped in value to $400,000. You have lost $100,000 on paper! This is where the thought process ends for many. People get so caught up thinking about their loss that they forget when you are moving up in the market what used to be an $700,000 home is now worth $560,000 using the same 20% drop in value.
If values had remained flat and there wasn’t a Real Estate correction you would be going from a home valued at $500,000 up to a home worth $700,000. A difference of $200,000. In the present buyers market scenario the difference is $400,000 to $560,000 or a spread of $160,000. If you are moving up you saved yourself $40,000.
What if you are moving down in the market? Lets turn the above example around. You owned an $700,000 home that is now worth $560,000. It is too large for your needs and has become expensive to heat, maintain and pay taxes on. You desire something more manageable and affordable.
Well guess what the home that you planned on buying five years ago for $700,000 is now only going to cost you $560,000. So what has happened is you have lost $40,000 in buying power. A 20% loss on 700k = $140,000. A 20% loss on $500,000 = $100,000. $140,000 – $100,000 = $40,000
So moving down isn’t ideal as moving up but a loss of $40,000 is certainly much different than taking a paper loss of $160,000 especially if it is going to make your payments and cost to maintain the home much more reasonable.
The biggest differentiating factor in looking at whether or not it makes sense to move often times boils down to what you are trying to accomplish. Is it a lifestyle change, looking to get into better schools for the kids, having a shorter commuting time, etc.
One of the biggest factors that should never be overlooked in your decision making process is the present cost of money compared to what you are paying right now. In other words what does the current interest rate environment look like. If you can get an even better interest rate than you currently have on your present home it could be the perfect time to find a new home.
Once you have made up your mind to sell your Massachusetts home there are three things that can ensure you will be successful:
- Price your home properly.
- Pick a top producing Realtor to work with.
- Make your home presentable and easy to show.
If you do these three things you can be successful in a buyer’s or seller’s market. There are plenty of Massachusetts homes still selling! The common denominator in most Real Estate sales are these three items.
Related Real Estate articles:
- Move or improve my Massachusetts home
- Home improvements with poor ROI
- Top Massachusetts Realtor
- Staging Massachusetts homes
About the author: The above Real Estate information on selling a home in a buyer’s market was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service the following towns in Metrowest MA: Hopkinton, Milford, Southboro, Westboro, Ashland, Holliston, Upton, Mendon, Hopedale, Medway, Franklin, Framingham, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.